Employee outsourcing hides forced labour in the workforce

Failure to monitor outsourced recruitment is resulting in companies inadvertently employing victims of forced labour, according to new research from the Universities of Sheffield and Bath.

Interviews with experts in business, NGOs, trade unions, law firms and the police showed that while companies can increasingly trace where their products come from, many are in the dark about the backgrounds of their staff.

The research, conducted by the University of Sheffield and the University of Bath’s School of Management, suggests that layers of outsourcing, subcontracting and informal hiring of temporary staff are to blame. This, say the researchers, enables victims of forced labour to be hidden within the workforce of companies and organisations – even those with the best intentions.

Statistics recently released by the National Crime Agency showed that the number of people reported as potential victims of forced labour and human trafficking in the UK has more than doubled in the past three years, with 3,805 people referred for help in 2016.

The researchers concluded that the key issue in tackling forced labour is ‘understanding the labour supply chain’ – the often unregulated networks through which contingent and sometimes forced or trafficked workers are recruited, transported, and supplied to business by third party agents.

Study co-author Dr Genevieve LeBaron, from the University of Sheffield’s Department of Politics, said:

“Leading UK companies are starting to belatedly wake up to the fact that their existing systems for detecting worker abuse simply are not fit for purpose for uncovering forced labour. But, as new initiatives emerge, the critical factor determining their success will be whether they meaningfully address the labour supply chains that feed their business.

It is these chains that make forced labour seemingly invisible even when the workers subjected to them are right in front of us in the farms, factories and construction sites that surround our communities.”

The study showed that most incidences of forced labour were several steps removed from the core workforce at the producer company. Within the agricultural sector these employees could potentially only be on site for a matter of days or weeks, making it difficult for producers to detect abuse.

Lead author, Professor Andrew Crane, director of the University of Bath’s Centre for Business, Organisations and Society, said:

“Companies have little hope of detecting modern slavery practices unless they adopt a new approach that focuses specifically on their labour supply chains – they need to be able to trace the origin of their employees in the same way as most now can for their products.

Twenty years ago most high street retailers did not have a clue where the products they sold actually came from. Since then, there has been a revolution in responsible business practices and companies have invested millions of pounds to trace the source of their products and tackle the myriad sustainability issues they found there. To prevent the misery of modern slavery from blighting our workforces companies must apply that same focus to their staff.”

CIPP comment

If you use labour supplied by a third party then HMRC’s guidance ‘Use of labour providers: advice on due diligence’ will help you understand how to safeguard your business from financial and reputational risk whilst maintaining the flexible workforce you need.